I have the same kite and live in St. John's, NF. I've been flying the Arc 840 for close to a year both on water and, lately, with skiis.
I think that your setup is correct. You should be able to see the vents when flying-therefore they should be facing you.
Your middlle lines (from chicken loop) should go to the front attachment points of the kite, as you stated, and with the outside lines going to the rear attachment points. I assume that the rear attachment points have a longer line to attach your flying lines to than the front lines? Since you said that the rear lines were slack when you let out the bar, while in the chicken loop, I think that this is certainly the case.
How much preinflation are you giving the kite before launching? Unless there is enough air in them prior to launching they are very unsteady. I have taken to using a small fan which I hook up to the car lighter to inflate my kite from the velcro. Once inflated and then sealed it stays that way, allowing you to attach your lines, and then is ready to go.
Finally, in terms of power and depower, from my experience it seems that depowering the kite acheived by the kite's position in the wind window. Obviously when the kite is directly downwind it has more power than when it is at the edge of the window. Arc's, when you let out the bar, accelerate and fly to the edge of the window. This acceleration does feel like you are powering the kite up! However, you are not. Full power is acheived when the lines are even- bar pulled in.
You say that you tried it out in 20 kilometres/hr wind? This is pretty light wind for the 840. The Peter Lynn website shows the range for the 840 in knots- starting at around 15 I think. Therefore, you really need closer to 25 kilometres/hr of wind to feel any power.
My address is email@example.com
if you have any more problems. I think that I am probably one of the closest Arc guys to Halifax.